Cochin Shipyard‘s share price has slipped by around 8% since it reported its earnings for the September quarter last week. However, analysts at Antique Broking remain cautiously optimistic about the stock.

The Cochin Shipyard Analyst: The research team at Antique Broking maintained its “hold” rating for the stock raising the price target to ₹1,627 from ₹1,622. The target reflects an around 15% upside from the stock’s current market price of around ₹1,400.

The Cochin Shipyard Thesis: The analysts highlighted that Cochin Shipyard’s standalone revenue at around ₹1,100 crore, exceeded estimates by 9.5%. Shipbuilding revenue reached ₹810 crore, while ship repair revenue was ₹280 crore, marking a 12.4% year-on-year and a 15.7% sequential increase.

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Despite higher revenue, standalone EBITDA at approximately ₹200 crore was flat and missed the brokerage’s estimates by 11%. The EBITDA margin dropped to 17.9% from 20.4% in Q2FY24 and 25.7% in Q1FY25. Management's guidance for a sustainable EBITDA margin of 20%-22% over the medium term appears reasonable, the analyst added.

The company's order book stood at ₹22,500 crores in September 2024, consisting of ₹15,000 crores in defence orders. The analysts highlighted that the management has projected 20%-25% year-on-year topline growth for FY25.

As per the analysts, Cochin Shipyard's solid order book provides revenue visibility for the next two to three years. However, the timeline for a second aircraft carrier project remains uncertain.

Price Action: Cochin Shipyard’s share price was down 3.31% to trade at ₹1,400 on Monday afternoon.

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Disclaimer: This content was partially produced with the help of Benzinga Neuro and was reviewed and published by Benzinga editors.